Senate Panel Meets on London Whale

Paul Vigna and Colin Barr discuss a Senate hearing on J.P. Morgan, and Chuck Jaffe looks at how consumers come out on top when financial services fight.

This transcript has been automatically generated and may not be 100% accurate.

... I ... euro ... which is the ... huge aged forty ... based on our models we believe the three billion increase heard of the a which was ... referenced to the CRM ... is entirely explained ... by a thirty three billion dollars ... notional increase ... in short protection ... long risk in your portfolio as Carl Levin live ... hearing this morning that the state ... Senate Hawkins Hill ... about the London Whale Whalen JPMorgan trades at one on ... a year ago this story is still developing ... write to finding out some new things this morning some new color ... or hear from executives have not heard from me at your ... morning this is the markets of mine Paul vignette ... here with you on this Friday we are here with Collin Barr are lucky enough to calm with this ... that I mean everybody in your group is really covering this story ran big story what it what have you seen so far this year and he didn't know before while ... this this I've been hearing raises in the report that they did raise new questions about how ... about how forthcoming JPMorgan has been Trout this whole process ... aam in addition because this ... is coming out of time when the Fed yesterday slept JPMorgan on the wrist about the stress test ... in the Fed's conclusion was that J P Morgan had weakness in its capital planning ... in ... in English that means the JPMorgan was ... sort of deceiving itself about how we fare in a downturn the Fed is saying ... you say you do what does well in a downturn we see no evidence that that's for ... the infamous the same problem that JPMorgan had during the whale trade was the day they had models that get the company the show this is going be huge problem ... and they all have in their heads that they were smarter than that in the market was wrong ... and so that there's all those of ... you ... the report makes it clear that there are substantial in trouble for questions that this company and JPMorgan would insist you that ... we didn't intend to mislead any body ... in deal with these oldest allegations ... that is until the printed page Center report is not something you just wash away right ... now we heard this morning from either drew who ran the unit that was responsible for ... that raising the trader was in her unit driver firmer this morning first time we've heard from her right and we are one piece of what she said this ... first ... the company's new car model was flawed ... and significantly understated the real risk in the book group Portage me ... an SEC game ... some members of the London team fell to value positions properly ... and in good faith ... clearly mistakes were made ... price I'm sure there she she took some responsibility Lhota was her unit which she also cut pushed some of the responsibility office a high stakes for me is a commune but Saudis aren't known to ... the stock to go down in history is one one more courageous performances in the right ... that the whole thing is that this unit made money for years ... making these doubts and then the bets got bigger and bigger and a sort of got out of control and the issue you is ... that the company did not exercise managerial control of them ... and that's you know she can say mistakes were made that she's the one whose daughter was prevent mistakes can be made ... and that's the whole problem with that with with with their performance and this ... is that they they aren't coming out and saying ... we've been saying we made mistakes right there saying that mistakes were made that they they want I think in general there their view of this ... is that there was sort of you are not quite room creating going on but people people overstepping their bounds right ... that be to look at the other way and say well that's your jaw batsman Smith Jonathan that from happening in management didn't prevent it from happening that you mention that the Senate report ... the Zulu wrote about on the front page of paper today three underpaid report about the trains ... I'd I think this is cynical immediate things to think ah well ... this is all grandstanding the hearings is more in the grandstands of Harlan get out there in passing at the convention for more yes ... what but is there is there I think the answer is yes ... is there a larger issue here ... that has not been resolved with these banks in how they go about their business like that that that's right people you talk about is an excellent Net think that's why this report ... has bipartisan support in the panel um you join McCain ... not new to the huge huge basher of the bank's new mates very critical comments about the use of management were coming soon this in this report ... in this comes at a time when people are saying here that before too big to fail thing has become a political issue again ... aam you people so far are saying ... Telefónica we we need to figure this out one way or another that tells me is going to happen immediately ... but Francis with the Volcker rule of this this is that this whole episode ... is going to and with JPMorgan backing off with that in a very aggressive position on the Volcker rule the Oracle which limits how banks can can use to gamble their own their own money ... in JPMorgan's going to make concessions date to the center left and who's been through so called for stricter interpretation ... and I think that that's what's happening here is the JPMorgan thought that they have put this to rest and in January when they issued their own report ... and that the report has commoditized improve the top tube in your way is exhausted is the claim that one s and in so when you look just one last point when they came out nice and a ... visit me at least two billion dollars in losses ... to put the peso that they have almost three billion dollars in losses ... in Europe that does this whole issue of the Coulter of are the banks telling us what's actually going on that's the big question out there in Washington that's that's the issue that the banks of the fuel ... it's tough combo I think you're a much ... but in fact two in recovering this or alive like me then you'll surely can go there to follow everything ... our friend evenly ... when we come back ... well a comeback ... winners and losers for the week ... the ... I ... the ... scales while I love the new graphic it's Friday here at the markets look what we do every Friday we talk about the winners and losers on the street in Deal land with Deal Journal blogger day Benoit ... was taken a quick break for me a lot you are we there yet ... you're literally right now you live blogging the JPMorgan hearing ... we took a second log losses for some ... time ... to take a second color can talk to stop the winners and losers was ... Qantas's is a big statement with the graphic that I let's get into it ... it was our first one of the weakest TPG accent this is ... an activist not a household name none of the song title that under the radar to the pitching on three big energy company SandRidge in and this week they got ... of settlement with the board ... did that puts the re TPG members on the board ... an essentially this is a super crazy to the CEO and chairman of TPG that name ... I mean of center start ... again income or ... there and determine his future ... in the next ... coming months in either case can be fired ... or is this day TPG skinny get to go before ... will assist you with a win yet ... it was the next one our next one is Apollo Global in metropolis ... the winners of twenty six ... at ... the ... time the number one right it's the whole Twinkie well that was the thing that they don't even know what to do it up and is now making the Twinkies or can he uses it so ... finally this week Hostess ... reached a deal ... and fifty one million to these guys ... are ... sweet cake brands to everybody who paid up for Twinkies any day thinking that there have ... been around ever heirloom that would be a bit ... so I guess the writers of the Twitter are people wonder is bringing its Carl Icahn on top of a cyclical that that ... is now agitating inside Dell is well positioned ... Bernshteyn is is not even five percent not a huge ... stake but but the position for Dell ... he is now a recent agreement with the board of directors the special committee ... it is trying to sell Dell ... Michael Dell and private Acree firms in the car like passenger Tesla in talks to ... his official might mean something bigger when Regis Wilson says is nothing for me right ... but the move from I was about to lose the losers of first one is ... from critically injured ... sure that is not at the top six slap it on there ... well this is a pretty big case so so the last few years ... others in this case going on in Massachusetts ... it alleges club deals when private Acree firms can teamed up to make these twenty billion dollar deals in two thousandseven ... more polluted ... and it essentially they were agreed to step down or ... ignore other deals in and do their own can be just what the case gone Swiss ... scientists are spoken to ... McAfee industry and the tax on each trade yet the ... the brokerage ... shares were down eight percent yesterday ... after Citadel their their largest shareholder ... the hedge fund ... said it was so now that it's not enough ... um which is pretty important this Citadel has places to sleep bailed out the tree ... with giving him tons of money ... they've been pushing for sale the tree ... the traits that in Arkansas last year Ken Griffin this head of Citadel was not happy about that now so ... what that means for the baby ... yet ... though the creator of which also left recently so here is just ... that we prepared ... for the big loser ... big loser ... two reasons to reading it even more golden with a rollover right ... ASA last night we learned the Fed ... and the stress has given a conditional approval so we should be very clear ... that this is actually not really a loss that were not failed and stress less to get the painter increased dividend ... and share buybacks ... live by ... something's wrong ... it's it's un clear that didn't really make clear what ... cheap mortgages to resubmit for them ... but I was worried about something and yet so by the third quarter and then Goldman Sachs will have to resubmit ... as a smaller then with your God reigns rightly RLI never funding from a Senate panel involving Carl Levin thanks to Inpex so it's ... it's it's a tough week for J P Morgan but ... workers balance of hearing of the night Friday but I think it was fun to get back to live life when we come back the big boys on the Street there fighting over something ... you could be the winner because of it ... for ... usually when the big boys on the street are fighting over market share for anything ... you're the loser but not this time actually ... there's something that you might be able to come out ahead on Chuck Jaffe joins us ... MarketWatch's Chuck Jaffe with this story ... I'd chalk identically I love to hear that the little guy might win something for once ... yes and the good news is comptroller's report of the natural order of things ... the bad news is you may have to sort of thing you're now for awhile because we're still in the evolution of what we're talking about here in ... UT apps which are slowly ... migrating towards where the big problem with the ETF which has always been the half to pay commissions on them ... is being eliminated as the brokerage firms and a big ETF providers fight each other for who is going to have most control the industry ... and what ... are we talking about ... when the Manitoba big names in this ETF world ... that are actually been combining that with time and ... well yeah this week we had Fidelity and BlackRock basically announced an expanded agreement they had agreed three years ago to ... do some things together they dramatically expanded that to what's happening now is that BlackRock is making sixty five of its BAE shares ETA that's the most popular brand of EPS ... available ... through Fidelity's online brokerage ... but no transaction fees ... and what's great about it is those sixty five each and apps cover ... they they represent eighteen percent of all ETF assets so it is ... in many cases the popular ETF to your thinking about yes these are some of the ones you really wanna go to ... as opposed to Schwab ... which a couple weeks ago one buildings OneSource platform ... that has uh hundred and five BT gaps ... but ... it's about a small ETF some other issues that haven't necessarily heard of ... that's not always so good to try the yes ... on her body yes ... three percent three a half percent ... of all ETF assets so what you've got these Schwab get out with something now Fidelity and BlackRock and that was something ... by the way ... what the Fidelity BlackRock deal really was saying was in the future ... Fidelity's gonna be doing some more ETF things when BlackRock Fidelity has virtually no ... ETF presents itself ... it's kind of what this is how it's getting into the game ... so that's also good for shareholders is that means more price what more choice at better prices and we've already seen ... price wars here ... is the continuation of that ... ultimately we're going to cash in ... high shot so what I mean frankly speaking what should investors be looking forward to the deal ... you should be looking to see whether the ups that you you owe now would you like are available on a transaction free basis and if they are how to get by it that way ... ally if you ... don't own eat yes but the thing that's stopping you is the euro dollar cost averaging per cent but man a hundred bucks a month and you don't wanna pay a seven dollar commission on underdogs every month ... when Audi should be taking a look to see if the issues ... that you want ... for free ... and then ... lastly if you don't have a self directed brokerage window in your retirement plan ... you should be asking for one ... especially if your plan is provided by Fidelity because Fidelity now the reason ... that out and ... seek to make a bit more ... employers put a self directed brokerage window in it ... so you should be saying hey let's see if they're gonna get better prices to the business encourage or employee benefits folks to make ETS available to you ... in your retirement plan which passed the beach or self directed brokerage with ... write to Kathy Aksland stuff thank you very much to ... the weekend right Sunday St Patrick's day that my kids AJ's them agreeing on my colors on where the colors my know more about ... the Monday will be here before you know it you need to be prepared for the week ahead who's gonna get repaired ... MarketWatch's Polya Lesova with you look at next week ... ally and I'm Canadian cell based in Pakistan ... well I will get out to put a ... million eye candy I know ... what though religion and ... political debate week next week for the Federal Reserve in particular that tended to give and don't want to place of meeting its two-day meeting the decision comes on Wednesday ... and the Fed is expected to keep August and chains rest rates on hold and the bond buying program ... at around eighty five billion dollars a month ... the big question is what will be discussing internal what does the fact that I'll think of our games think of relatively include economic data which had a decent may ... yet especially that of Intel to the point when we saw a declining yen employment based ... on what someone else would peak it than expected ... I know Sunday economic data has been vague look sector Citi field sales weekly jobless claims and so on ... ahh and also ... I next big Ben Bernanke e the Fed chairman will also have a press conference ... so the point is to get to aam scheme in detail about all of these issues ... I don't think the obvious is the focus the Fed would do ... well will will get rid of the debate on the housing market and that the US housing starts ability when its existing home sales ... I will get that ... housing price index as well ... and all of that the Fed is likely to confirm the ongoing recovery in the housing market ... aam and that's that's what extent it will also gets weekend Talbots claims that will be interesting after he quietly so this week ... on as well but then in April the highest ... tells me that that was when it is one big piece in use data coming out of China yes I think that there's a lot of watching TV that the world's second-biggest economy ... I has been grappling with ... some slowdown theorists ... on so I he HSBC China ... PMI V there will come up next week so Infiniti we still are declining ... I mean that the key to indicate there but that may have been influenced by the time and the numeric ... Marriott immune related factory ... so that they didn't much will be very interesting email hopefully it will ... hire showing improvement it was so that the Chinese economy that is is actually doing quite well but that will be included in the case that once I Polya excellent stuff as always thank you very much ... that is it for us to Meghan you see Wendy Bounds on Lunch Break Iran have a good happy Stacy Patricks day and we will see you on Monday ...